Government data show house prices fallingHouse prices falling at record rate

12 November 2008

Failing to pay your mortgage could cost you your house

The annual rate at which house prices are falling continued to accelerate during September to hit a new record of 5.1%, government figures showed today.

The fall left the average property in the UK costing £208,583, nearly £12,000 less than a year ago and the lowest level since March 2007.

But homes lost only 0.1% of their value during September itself, well down on August's drop of 2.7%.

Estate agents are suffering

The figures came as the Royal Institution of Chartered Surveyors said estate agents sold an average of just 10.9 properties each during the three months to the end of October, dropping to only six homes in London.

Around 81.8% more chartered surveyors reported seeing price falls than those who saw price rises.

But on a brighter note, a balance of 20% of those questioned said they thought sales levels would increase during the coming three months.

House prices are now falling in all regions of the country on an annual basis, with Northern Ireland seeing the biggest drop of 15.8%, followed by the East Midlands and West Midlands at 7% and 6.8% respectively, according to the Communities and Local Government department (CLG).

Gloomy outlook

Howard Archer, chief UK and European Economist at IHS Global Insight, said: "Overall, the latest plethora of data and survey evidence on the housing market does little to alleviate the belief that prices are set to fall markedly further over the coming months.

"Indeed, even though mortgage lenders are largely passing on last week's 150 basis point interest rate cut by the Bank of England, the fundamentals for the housing market remain largely unfavourable."